In August 2026, the global semiconductor trade landscape reached another significant moment. According to a report by Reuters on August 5th, two sources familiar with the matter revealed that Samsung Electronics and SK Hynix are evaluating etching equipment from China's Micro-Electro-Mechanical Systems (MEMS) companies, considering introducing it to their memory chip factories in China to hedge against supply chain risks posed by increasingly stringent US export controls. Although both South Korean giants remained cautious—Samsung explicitly denied having "tested or considered adoption," and SK Hynix declined to comment—the news itself is enough to reveal the deep fracturing occurring in the Asia-Pacific semiconductor industry chain. Export Control Paradox: Containment Spurs "China Alternatives" This was not a sudden idea. Two sources pointed out that about two years ago, as uncertainty began to rise regarding whether the US would continue to allow Samsung and SK Hynix to import US equipment into Chinese factories, these two memory giants had already begun testing MEMS etching equipment. Although the evaluation has not yet translated into large-scale deployment orders, MEMS has gained a valuable opportunity to knock on the door of global top-tier chip manufacturers' supply chains. Control Evolution Timeline * 2023: The US Department of Commerce granted Samsung and SK Hynix "Verified End-User" (VEU) status for their factories in China, allowing the import of controlled equipment without case-by-case licensing. * 2025: The US revoked VEU authorization, increasing uncertainty regarding operational prospects in China. * 2026: The two companies switched to obtaining annual licenses while simultaneously testing alternative solutions such as MEMS equipment. * August 1, 2026: A new round of semiconductor equipment export controls to China by Japan takes effect, placing advanced packaging and back-end equipment under case-by-case review. Even with an annual license, the industry generally worries that future restrictions will not only cover new equipment but may also extend to the maintenance, upkeep, and spare parts replacement of existing Western equipment—which is the fundamental driver prompting the South Korean giants to prepare in advance and include Chinese suppliers in their backup lists. China's Capacity: The Indispensable "Base" The degree of reliance of Samsung and SK Hynix on their Chinese factories determines that they cannot easily "decouple." According to estimates from TrendForce, approximately 30% to 35% of SK Hynix's global DRAM capacity in 2026 comes from operations in China, while Chinese factories contribute approximately 30% to 35% and 35% to 40% of Samsung's and SK Hynix's NAND capacity, respectively. Samsung's NAND factory in Xi'an, SK Hynix's NAND factory in Dalian, and DRAM factory in Wuxi currently rely heavily on etching machines from US equipment suppliers such as Applied Materials and Lam Research. A disruption in equipment maintenance could directly impact global memory supply, leading to production line shutdowns. MEMS's confidence stems from its deep roots in the Chinese market. Its etching equipment is already in the production lines of local NAND giants such as Yangtze Memory Technologies. According to TechNews, SMIC has cumulatively purchased over 800 MEMS machines. Yin Zhiyao, Chairman of MEMS, previously told the media that the company's etching technology covers the full spectrum of processes from mature 65nm to advanced 5nm and 3nm, with some products already adopted by TSMC. Deutsche Bank also predicts that Chinese equipment companies such as Northern Huachuang, MEMS, TopJoy Technology, and Shengmei Shanghai will all exceed $1 billion in revenue in 2026, collectively accounting for 25% to 30% of the approximately $28 billion wafer manufacturing equipment market in China; excluding lithography and metrology equipment, the share of Chinese suppliers approaches 40%.

"Dual Track Parallel": Introducing While Isolating

What is interesting is that while storage giants are considering introducing Chinese equipment for their Chinese factories, they are also reducing their reliance on Chinese equipment in sensitive areas. According to a July report by ETNews in South Korea, due to concerns about potential further tightening of controls by Washington, Samsung and SK Hynix are working to replace some Chinese-made equipment with products from South Korea, the United States, and other regions, including lithography stripping systems and rapid thermal processing equipment from the American company Mattson, which was previously acquired by Chinese firms. TSMC acted earlier—last year, it excluded equipment from Mattson and NAURA from its 2nm cutting-edge production lines.

This "dual track strategy" reflects the supply chain logic of the geopolitical era: Chinese equipment is an acceptable "backup option" for mature processes and in China-based factories; however, for advanced nodes and sensitive areas, an "isolation wall" consistent with the Western bloc must be built. The Asia-Pacific semiconductor supply chain is thus accelerating toward binary divergence.

Trade Data Confirms: Storage Boom Coexists with Control Escalation

In parallel with supply chain restructuring, Asia-Pacific semiconductor trade is experiencing a historic boom. Data from the South Korean Ministry of Trade, Industry and Energy shows that South Korea's exports surged nearly 63% year-on-year in July to $98.99 billion, with semiconductor exports increasing by 179% to $41 billion, exceeding the $40 billion mark for the second consecutive month, driven primarily by demand for memory chips. A TrendForce survey indicates that driven by AI server demand, the contract price for DRAM is expected to rise another 13% to $18 billion in the third quarter of 2026, and the contract price for NAND Flash is also expected to rise by 10% to $15 billion, placing memory in a super-boom cycle of rising quantity and price.

At the same time, the regulatory game is escalating. On August 1st, Japan officially implemented a new round of semiconductor export controls targeting China, for the first time including advanced packaging back-end equipment such as high-end wafer bonding machines, ultra-thin wafer thinning machines, and laser dicing machines in case-by-case reviews, with approval periods lasting 3 to 6 months. Industry statistics show that the rejection rate of applications is close to or even exceeding 70%, effectively creating a "quasi-supply shortage" effect. Furthermore, the incident reported by South Korean media on August 5th—"Apple's price pressure on GXL Memory was rejected"—affirmed this from another angle: in a tight memory market, the bargaining power of Chinese suppliers has significantly increased, and the era of "trading price for volume" is coming to an end.

Investment Perspective: Opportunities and Risks in Supply Chain Restructuring

For investors in the Asia-Pacific region, this round of supply chain restructuring holds multiple implications. First, the logic of domestic production for Chinese semiconductor equipment continues to strengthen, with leading enterprises continuously improving revenue and order visibility, and the local equipment industry chain is transitioning from being a "substitute" to an "exporter"; second, the sustainability of the memory super-cycle depends on the race between AI demand and capacity expansion, with both control risks and price fluctuations existing; third, the overlapping equipment control policies from Japan, South Korea, the United States, and China will drive up compliance costs and the need for regionalized layouts in global semiconductor trade "fragmentation," providing a valuation premium to companies with diversified supply chain capabilities.

It is foreseeable that the evaluation of NAURA equipment by Samsung and SK Hynix, regardless of the final outcome, has written a new chapter in Asia-Pacific semiconductor trade—when controls attempt to draw boundaries, the market will always reconnect in a more complex way. This game is far from over.

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